Cash Flowing Tampa Bay Industrial Park

Investment Progress

Florida, USA

Commercial

Invest with others

Min Investment - $5,000

Projected IRR - 82%

Projected Annual Return - 9%

Property

$12,910,000

Price

$350,000

Investment offering

5 years

Term

165,000

Property sq. ft.

0

Lot sq. ft.

$78

Price per sq. ft

This is an opportunity to invest in Meridian Gateway Center, an existing 165,872 square foot, multi-tenant business park located at Scherer Drive and 34th Street North in St. Petersburg, Florida, which is part of the greater Tampa Bay metro area (the “Project”). The Project offers easy transportation access and is considered one of the best business park properties in Pinellas County’s premier Gateway / Mid-Pinellas industrial market. Built in 1984 and 1985, the Project consists of four light industrial buildings and is currently 86% leased to fourteen tenants.
The Sponsor, Avistone, closed on the Project in Feb 2015 and began executing its business plan, which includes improving operations through value added management, aggressively pursuing improved leasing channels and increasing rents upon tenant rollover. The Sponsor has significant experience executing this type of business plan and is solely focused on this type of industrial property, having recently acquired two similar complexes in Sacramento, CA and one in San Antonio, TX.
The Project is already returning cash to its existing investors and paid an annualized cash return of 9% for Q2 2015. This Project is an opportunity to invest in a stabilized, high-yielding asset at well below replacement cost in a tight market. With leasing risk spread among fourteen tenants, the Project offers substantial in-place cash flow, as well as value creation / capital appreciation via increased occupancy and rental income.

Location

The Project is located in the heart of the Gateway / Mid Pinellas submarket in the center of Pinellas County (St Petersburg), Florida’s most densely populated county. The location features easy transportation access to the Howard Frankland Bridge (I-275), the Gandy Bridge, and is a 15-minute drive to the Tampa International Airport.

Market

The Tampa industrial market experienced 268,000 sf of positive absorption during the second quarter of 2015, the eighth straight quarter of positive absorption. This brought overall vacancy down to 7.4% in Tampa and even lower, 5.8%, in the Gateway / Mid-Pinellas submarket where the Project is located.
Strong technology base - Approximately 30% percent of Florida’s medical technology companies and 22% of the micro-electronics companies within the corridor are in Pinellas County.
Strong manufacturing base - Pinellas has the second largest base of manufacturing employment in Florida. This results in excellent availability of a quality workforce in engineering, production, research and management of manufacturing firms.
Industry clusters - Pinellas has well-developed industry clusters in the life sciences, medical technologies, aviation, aerospace, defense, business, financial services, information technology and advanced manufacturing sectors.
Employment - Pinellas County has over 7000 professionals in the aviation and aerospace over 22,000 in business and financial services, over 4,500 information technology companies, over 7,000 in the medical technology field and nearly 1,800 in optics and photonics.

Finance

The acquisition price is approximately 65% of replacement cost. The lack of development sites and high construction costs in the Gateway / Mid-Pinellas market help restrict supply and increase rental growth in the response to growing demand.
In the first year only one tenant (7% of the total space) rolled over. Several of the current tenants have specialized unit features and made major tenant improvement investments within their suites, making relocation unlikely. Further, 33% of the rent roll is made up of national companies including General Dynamics, Sun Pharmacy and Service Experts. In addition to these type of major tenants, the area also features a strong base of small to mid-size manufacturing companies.